A program will take effect on April 5 that will encourage homeowners at risk of defaulting on their mortgage to short sale their homes.
The program will pay the homeowner $1,500 and the servicing bank another $1,000 to coordinated a short sale, explained the New York Times.
Short sales occur when a home is sold for less than the amount owed on a mortgage, said the New York Times. Investment pools will receive more money in a sale than in a foreclosure, and homeowners will receive less damage on their credit rating.
The Huffington Post says over a million homes were lost to foreclosure last year, many because the homeowners had two mortgages.
An existing $75 million mortgage readjustment program, the Home Affordable Modification Program, introduced by the Obama administration has failed to help a single homeowner, reported the Huffington Post.